Lobster prices fall as the economy suffers

Lobster prices fall as the economy suffers
KIRK MOORE
Published: 12.16.2008
POINT PLEASANT BEACH, N.J. - Cheaper than a pack of hot dogs - that's how some Maine fishermen describe the prices they are getting for lobster, at $2.40 to $2.60 a pound, down from a $10 high in spring 2007.
"Now it's getting to the point where your average consumer can afford to buy them," said John Godwin of Point Lobster Co. in Point Pleasant Beach as he looked over 10,000 pounds of fresh-caught New Jersey lobsters crawling in the company's indoor lobster pound. "If the Canadians get a couple weeks of good fishing, it's going to keep the price low. With their equipment, they can go fishing in weather when our boats would be tied up."
New Jersey lobstermen are getting slightly better prices at $3 to $3.25 a pound in recent days, but the consumer pullback in spending is affecting seafood businesses across the board.
On the finfish side of the business, fisherman John Cole said, "monk tails (monkfish) are worth a little money. But everything's depressed. People aren't going out to eat."
Furthermore, increased government regulation over the years has taken away fishermen's traditional flexibility to switch between species, Cole said.
Lobster deflation started with the bank panic in Iceland. By early October, the meltdown in credit reached Canadian seafood processors, who usually buy and freeze between 50 percent and 70 percent of Maine-caught lobsters. It turned out that processors got much of their financing from Icelandic banks, which have much experience in the seafood business but were early victims of the crunch, said Peter McAleney, owner of New Meadows Lobster in Portland, Maine.
Without their usual credit lines, processors could not buy lobster, and the supply chain backed up immediately, McAleney said.
"In a matter of a just a couple of hours, it dropped like $1.50. Just like the stock market," Godwin said, recalling disbelieving e-mails he exchanged with buyers as the news spread from New England fish exchanges. "The whole European export market came to a screeching halt."
Now, "it's the market in general ... the institutional market, restaurants, cruise ships. People just aren't eating out," said professor Robert Bayer, director of the Lobster Institute at the University of Maine.
The industry has seen "nothing like this that I know of," said Bayer, a longtime lobster biologist. "I remember when I first started working on lobsters, the old lobstermen used to say prices followed the stock market: 'When the stock market's good, lobsters are good.' "
For consumers, this will mean a reappearance of bargain lobster promotions in supermarkets, Godwin said.
As for lobstermen, after seeing modest rises after the initial freeze-up, they saw prices drop again - and stay there.
Lobsterman Larry Knapp, who chairs Maine's state regional lobster council for waters around Boothbay, said they see prices as low as $2.40 to $2.60 a pound while reports from harbors farther Down East came in at $2.25 a pound - seriously threatening the ability of fishing families to make it through this winter in rural counties with little other work available.
The lobstermen are squeezed between low prices and the cost of diesel, said Marty Stillfusen, a former lobsterman who owns Red's Lobster Pot Restaurant in Point Pleasant Beach.
Among local lobstermen he buys from, "I had guys tie up in September," Stillfusen said. "They said, 'I can't afford to go at these prices. It would cost me money.' "
The restaurant's summer season runs through October, so Stillfusen saw the rapid impact of both the consumer pullback and lobster prices. "The economy is slow, and lobster is generally a reward-type of product. People are going to cut that first."